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Dealing With Finances In Preparation For A
Divorce
By: Ed
La Vance Adams l0/l/09
Objective: The objective of this article is to
suggest some avenues for couples for dealing with
finances when a divorce is on the horizon.
Summary: When the marriage ends, the issue of
money becomes very emotional. The couple can minimize
the stress and resolve the issues. However, it is
important to retain one's good sense and to heed the
advice of the hired experts.
"What is mine is yours" is the lovely romantic
and sincere belief that many have when they marry. This
changes rapidly, when the marriage is over. Problems
can be avoided with careful planning and execution.
In many marriages if not most, the couple will
open a joint checking account and possible a joint
savings account. Usually, no restrictions are placed on
the account and each has equal access to the money.
This arrangement works well if the parties keep each
advised of the activity on the accounts.
When the marriage dies, however, the first
inclination is to rush to the institution that has the
accounts and remove all the money before the other
spouse can do the same. Each is entitled to the money
and no crime is committed. However, most states have
standing orders, prohibiting the selling or disposing of
marital property before a final decree. The offending
party could therefore, be subjected to sanctions.
This is the main reason to avoid taking the
money out of the accounts. There are others that are of
equal importance. The partner who takes the money
usually has a reason for doing so. These reasons
include but are not limited to: l) I deserve it. 2) I
earned most of it. 3) I need it more.
Each of these reasons, while possibly valid, is
self-defeating. The ability to negotiate is compromised
and the court is likely to take a negative view on the
behavior of the offending party. A more hostile
environment is now created.
Instead of having a race to the bank accounts,
the parties should retain the services of an accountant
or a tax attorney. These professionals will be able to
determine the amount of the joint finances and how best
to divide them. Included in this division is whether
one spouse needs to pay the other "maintenance".
The accountant or tax attorney will be able to
best advise on ways to minimize the tax consequences
that go with dissolving the marital contract and also on
the best methods for investing the money that each
partner gets. Such matters are usually complicated and
best handled by experts.
Marriage is expensive--divorce is even more
expensive. There are often unnecessary expenses in the
dissolution of a marriage. Examples of these are
lengthy depositions that only gather information that is
already known and the padding of legal bills with hours
of "research". These need to be avoided . However, the
hiring of an accountant or ax attorney is very apt to
pay for itself in the end as they help individuals to
save money.
Once again, money is a highly charged emotional
issue. The levels of stress and anxiety can be greatly
reduced by hiring a financial expert to evaluate all the
resources and propose a fair settlement for everyone.
In this way the couple will be able to focus on the "big
picture" which means being able to see the consequences
of the settlement that happens now in ten years. This
is the best way to reach a settlement that is beneficial
to all.
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